Turnaround Improves Profits by $15 Million Annually

Business ServicesPerformance ImprovementRefinancing & TransactionsTurnarounds & Restructuring

300M

Annual Sales

100M

in Debt

Rumpke Consolidated Companies, Cincinnati Ohio

Challenge

Third largest privately held waste management and landfill company. $300 million in annual revenues. $100 million debt. 

  • Over expansion (high capex) and poor management oversight caused EBITDA decline, negative cash flow and covenant defaults
  • Company was in default under its loan agreement.
  • Geographic expansion and focus on top line revenue led to decline in EBITDA.
  • Senior management slow to react to deteriorating cash flows and profit margins.
  • Family governance issues compounded problems – two cousins as co-CEOs and 90 family members involved in the business.

Solution

  • Engaged as Financial Advisor and subsequently interim COO
  • Refocused company on core operations and on EBITDA improvement.
  • Sold off non-core assets (low revenue geographies and land fills), which generated $40 million in net proceeds and had minimal impact on EBITDA.
  • Improved reporting, integrating 52 P&L centers into 8 market segments.
  • Enacted significant long-term management succession plan for the family-owned enterprise.

Results

  • Improved EBITDA by 25% and increased free cash flow by over $15 million.
  • Implemented new management structure with single CEO.
  • Debt refinanced on 100% senior basis, eliminating $60 million sub-debt.
  • Reduced annual interest expense by $7 million.
  • Bank repaid 100% upon refinancing and participated in the new financing.